Halister News

(Bloomberg) -- Turkey’s automotive exporters seen offering good value following stocks’ over-reaction to Wednesday’s 40% hike in annual vehicle taxes, HSBC analysts including Cenk Orcan writes in report.

• Says, for an average vehicle ownership, taxes would now equate to ~2% of the new vehicle purchase price, up from 1.5%
  • “This should have very limited impact on overall Turkish vehicle sales and it could be an opportunity to build exposure in exporters”
• Prefers Tofas to Ford Otosan due to its stronger operating margins, continued market share gains and still lagging share price YTD
• Ford Oto’s exposure to the imported car market in Turkey seen creating “margin volatility from time to time” and pulls its defensiveness one notch below Tofas’ at times of weaker lira
  • That said, Ford Oto’s medium-term growth outlook is better than Tofas’ from a capacity perspective and its dividend yield is superior
• Tofas raised to buy from hold, PT raised to 36 liras
• Ford Oto maintained at hold, PT raised to 49 liras
• Dogus Oto maintained at hold, PT raised to 9.35 liras from 9.10 liras
• Turk Traktor maintained at hold, PT cut to 83.70 liras from 90 liras

To contact the reporter on this story: Tugce Ozsoy in Istanbul at tozsoy1@bloomberg.net To contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net Angela Cullen